Caerus Investors, a small New York-based hedge fund, just
released its second-quarter letter, and Business Insider got its
hands on a copy.

The fund runs through all of the various challenges the market
faces before offering an opinion on why the market is pushing
past these problems.

It all comes down to one thing, according to Caerus:
millennials.

Here's the excerpt:

"Within a market backdrop full of fears, but, nonetheless
marching higher, we do detect a plausible rationale for the
bullishness, especially as it pertains to stocks in our consumer
universe. While millennial consumer preferences differ greatly
from those of past generations, a topic we covered extensively in
last quarter's letter, the sheer number of millennials coming
into prime spending years presents a powerful catalyst over the
next five to ten years.

"The largest single age group of the roughly 92 million
millennials are approximately 4.6 million 25 year-olds. Why is
this significant? The jump in household spending is most profound
from the 25-35 age group demographic segment, an approximate 50%
increase in spending per household. The drop in boomer spending,
as they become empty nesters post 55, is also worth noting.
However, this drop in total dollars is still well less than the
gain in spending from aging millennials."Caerus

The firm's Caerus Select Strategy, which focuses on
consumer stocks, has returned 8.8% annualized since it launched
in July 2011. The strategy is roughly flat for the year, rising
0.63% through July 29, according to the letter. The firm
managed $181 million, including trading allocations from
separate accounts, as of June 1.